Men with M.B.A.s make $400,000 more during a career than their female counterparts

While a woman nearly ascended to the White House in 2008 and the number of women at the helm of Fortune 500 companies has grown fivefold since 2000, the glass ceiling in the business world isn't starting to show the cracks that many people assume it has, the results of a new study indicate.

Catalyst, a nonprofit focused on expanding opportunities for women in the business world, conducted a survey of more than 4,000 M.B.A.s who graduated between 1996 and 2007 from business schools across the world, and found that women with M.B.A.s earned $4,600 less initially than their male counterparts, on average, across all industries.

Not only did women start with lower salaries, they had fewer opportunities to increase their earnings, the study found. In 2008, for example, promotions netted men an extra 21 percent in compensation, while women garnered 2 percent in additional salary due to promotions. All told, Catalyst's data indicate that women lose out on more than $400,000 in salary over a 40-year career. "A lot of people just suggest that if we just give it time, the gender gap will go away, but we see if you give it time the gap gets wider," says Christine Silva, a research director at Catalyst.

The study also found a wider gap among students who have fostered relationships with mentors. Data indicate that the mentors -- who advocate for students during the job search -- benefitted male students more, as males' mentors were collectively higher up the corporate ladder than women's, thus having more sway over hiring and compensation decisions. In all, men with mentors earned an average of $9,260 more in starting salary than women with mentors.

Silva and several business school administrators put much of the onus for this gap -- and the responsibility to close it -- on the corporate world. That said, they indicate that business schools can, and should, do more to help prepare female students to overcome these obstacles. Some, such as the Quinnipiac University School of Business are already making strides.

Susan McTiernan, the business school's associate dean for graduate programs, says the school recently created a chapter of the National Association of Women M.B.A.s -- a nonprofit that tries to propel women to more leadership positions in business -- and routinely imparts the importance to female students of being tough and shrewd during salary negotiations. Rather than simply taking the first or second offer, McTiernan says, students should arm themselves with compensation information from the firm making the offer, as well as that of similar positions at other firms, and then hold their ground. "Being a good and tough negotiator at the beginning is really critical," she says. "[Otherwise], it's an uphill battle."

McTiernan also emphasizes entrepreneurship to her female students -- a route unencumbered by the restraints of corporate culture or biased salary structures. "They can rise or fall [based on] their own capabilities in a different way than they would within a corporate hierarchy," she says.

At Case Western University's Weatherhead School of Management, women in the M.B.A. program are encouraged to consult with professional coaches who can set realistic salary expectations prior to negotiations, allowing them to understand if they're being low-balled.

Diana Bilimoria teaches an M.B.A. course dubbed "Women in Organizations" to a group of about 50 students each year at Weatherhead. The course is designed to help female students adapt to, and flourish in, the corporate environment. "The pay gap education issue is a critical one," Bilimoria says. "[This class] improves women's abilities to best position themselves in job markets."

And while these efforts by schools are a step in the right direction, the fact remains that only about 14.4 percent of executives and 7.6 percent of top corporate earners at Fortune 500 companies are women, according to a separate Catalyst survey, indicating the biggest barrier to change remains at the highest levels of the world's corporate culture. "That sends a message to our female M.B.A.s that maybe these environments aren't as friendly as they could be," says McTiernan of Quinnipiac. "Some of that might be changing a little bit, although it is a very slow process."

 

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